Question

The simple interest on a certain sum of money at 6%per annum for 3 years is₹432.What is the compound interest on the same sum of 2 years at 5%per annum ,compounded annually

Answer 1

Answer:

Rs. 246

Step-by-step explanation:

First part of the question:

Simple Interest gives a fixed interest rate every year.

Thus, interest rate per year = 432/3 = 144

If 144 is 6% interest, then Principal = 144/0.06 = Rs. 2,400.

Second part of the question:

At 5% compound interest for 2 years, the interest amount will be

$(2400 \times (1 + {0.05} ) ^{2} ) - 2400 = 246$